Printed Circuit Design & Fab Online Magazine - Current Issue

Board Buying

Greg Papandrew

American manufacturers are throwing away business opportunities. Are you?

According to a recent statement by US Undersecretary of Defense for Acquisition and Sustainment Ellen Lord, national electronics procurement is at a crossroads.

“[America] can no longer clearly identify the pedigree of its microelectronics,” she said. “Therefore, we can no longer ensure that backdoors, malicious code, or data exfiltration commands aren’t embedded in our code.”

According to Lord, a variety of price pressures – ranging from government regulations to labor costs – have driven manufacturing of electronics offshore and created not only an economic imbalance but a security threat as well. “That’s what we need to reverse,” she said.

Like the Defense Department, American consumers also support bringing manufacturing back onshore. They believe the “Made in USA” slogan means saving American jobs and, often, superior quality of goods. They support “reshoring” – bringing the manufacturing and assembly of goods – back to the US.

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Read more: Made in America is Great – If You Can Do It

Greg Papandrew

Being ready to pivot offers flexibility and keeps vendors honest.

What is your company’s PCB buying strategy as we emerge from the confines of the Covid-19 pandemic shutdown? Do you have one?

Those responsible for corporate procurement need to understand supplier diversification is the key to remaining competitive in this challenging economy. Yet, many OEMs and EMS companies have invested too much of their annual PCB spend with only one vendor. That could prove to be a costly mistake.

I understand and appreciate vendor loyalty, but are you leveraging your vendor, or are you being leveraged by your vendor?
The truth is companies that stick with this one-vendor approach will have a harder time remaining competitive in the post-pandemic world. “We have used this vendor for years” is not a viable strategy.

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Read more: What is Your PCB Pricing Game Plan?

Greg Papandrew

Understand what the transaction means for customers.

Your PCB supplier has been acquired. Will this acquisition benefit you as a board buyer? Or will it lead to higher prices and a reduced level of service?

The answer may depend on how you react.

Vendor acquisitions can cause supply-chain disruptions, especially when the acquiring firm has a competing product line. What is troubling about these transactions is few PCB buyers seem to understand the real economics involved, or why they happened in the first place and what it means to them as customers.

Acquisitions usually fall into two categories: Either the acquiring firm buys the present customer base and its revenue stream, or it acquires some leading-edge or dissimilar technology of the acquired supplier – like a rigid supplier acquiring a flex manufacturer, for example. Either way, the goal of the acquiring firm is to catapult its sales efforts.

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Greg Papandrew

Or will the West continue to risk exposure?

The massive disruption caused by Covid-19 has revealed the fragility of the global supply chain. With proper leadership, however, many companies are adjusting (or will adjust) to the changes made necessary by this pandemic.

Predictably, this unprecedented disruption has prompted calls for nations to onshore their manufacturing. It’s an argument that pops up periodically. And on the surface, it does make sense. Why leave a domestic market so vulnerable to what’s going on in the rest of the world? Why not build all we need here?

But here’s some straight talk: It is simply not realistic to think we can bring all manufacturing – including printed circuit boards – back to Western shores.

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